The following is an early version of an strategy memo for our vision for GreenChain.

Read our retrospective on Sunsetting GreenChain

Problem

The U.S. food supply chain has limited discoverability, hindered pricing communication, poor product traceability (which impacts food safety). All the markers of economic inefficiency for the most critical leg of the American economy.

• Orders are placed and fulfilled via email or SMS with sellers connected via word-of-mouth, with no uniform pricing, delayed payments, and no central place for discovery aside from Google Search.
• For the 500,000+ small-medium (non-chain) restaurants in the U.S. working with the 16,500+ small-medium distributors (source), which are the primary distributors of fresh food (the most challenging, time and temperature bound logistics), the restaurants lack the financing and pricing power of their large competitors.
  • $268BN in annual revenue. Based on 2016 revenue data, the top 8 foodservice distributors account for 41% of the market. Small distributors (staff of 10 or less) represented 66.5% of the total number of active firms in this sector or 5.9% of sectors revenue.(source)
• Distributors and wholesalers rely on their existing customer network for sales with limited channels to expand their reach.

Product

GreenChain is an online B2B marketplace that connects foodservice institutions to fresh food vendors and brands. For restaurants, we digitize their ingredient ordering, enable discovering and purchasing from new vendors, and provide net 21 terms on all shipments. For vendors, we provide new customers, immediate payments on sales, and take a small transaction fee on new accounts.

• "Faire for fresh food"

At scale, we will use our distribution and aggregated data to reduce food waste, which is one of the largest opportunities to mitigate climate change (40% of food produced in the US is wasted).

Target Customers

There are two target customers (each side of the marketplace):

1. Buyers: Small-medium restaurants and foodservice institutions (e.g., ≤ 10 locations) ordering their ingredients on our marketplace.
   • Why "small-medium":
     • Not restaurant chains who likely have consolidated sourcing operations compared to location-based ordering where a chef, for example, sources her ingredients.
     • 70% of U.S. restaurants are single-unit operations (National Restaurant Association)
2. Sellers: Small-medium fresh-food vendors, wholesalers, and producers (e.g., ≤ $1B sales) selling their products on our marketplace.
   • Why "small-medium": Not large vendors (like most IFDA members) who have existing sales channels, sales teams, and even digital (e-commerce) ordering solutions. Such companies.

Buyer (Restaurant) Value Propositions

1. Discover products, vendors, and better deals - Currently, restaurants scarcely research alternative vendors because of the inaccessibility. Our marketplace aggregates products across vendors to enable restaurants to compare prices, delivery days, and attributes such as local and organic. Restaurants find substitute products when there are stock outs. They can also input their product list and search for optimized baskets across vendors to satisfy minimums.
2. Lower prices via buying group - As a buying group (i.e., Group Purchasing Organization (GPO)), we have the purchasing power to provide lower prices via our volume discounts with vendors.
   • Our category management team owns these negotiations and sets target prices base on research of item-category, supplier, and region.
3. Digital ordering and payments - Currently, restaurants place orders with several vendors through email, SMS, phone and manually record invoices. Our service centralizes this process and tracks historical orders and preferences.
4. Net 30 day terms - Purchases made with net 30 day terms won’t be charged until 30 days later after the order, giving buyers time to sell products before ever paying for them.